Startups did not go from $1 million -> $1 billion of revenue in 2 years...until now.
Cursor (well actually Anysphere, which is the company name even though everyone knows Cursor) raised a massive round at a nearly $30B valuation. The main reason for that eye-popping headline figure was their growth from $1M to $1B in the 2 years since Cursor launched.
What does this mean for everyone else in startups?
"Great" growth has been redefined. When the top end of the market experiences such a profound change in a short period of time, the trickle down effect of increased expectations hits everyone.
That redefinition explains a lot of the seemingly odd behavior from venture participants lately. Why are they (and by they I mean big funds, usually) so disinterested in companies that are growing well? Because well is not great, and great is higher now.
There's only so much oxygen in startups across many narratives. When one narrative (like AI code creation) gobbles up oxygen to itself, other narratives and sectors will suffer from disinterest. Is this right? No. Does this happen? Yes.
Revenue expansion at this rate completely overwhelms any concerns about margin, profitability, etc. It really doesn't matter in the moment.
Historic revenue run rates + 12x valuation pops in a single calendar year...and very few IPOs to speak of. This dichotomy explains the frenzy of attention on getting retail (or retail-ish) access to the late stage private markets. See Robinhood's latest fund as a clear example.
Cursor is not the whole market 😁 hang in there, founders.
DISCLOSURE: This communication is on behalf of eShares, Inc. dba Carta, Inc. ("Carta"). This communication is for informational purposes only, and contains general information only. Carta is not, by means of this communication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services nor should it be used as a basis for any decision or action that may affect your business or interests. Before making any decision or taking any action that may affect your business or interests, you should consult a qualified professional advisor. This communication is not intended as a recommendation, offer or solicitation for the purchase or sale of any security. Carta does not assume any liability for reliance on the information provided herein. © 2026 Carta. All rights reserved. Reproduction prohibited.
